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OAO - Oando Plc - Acquires two rigs from Shell

Release Date: 27/07/2009 07:30:01      Code(s): OAO
OAO - Oando Plc - Acquires two rigs from Shell                                  
Oando Plc                                                                       
(Incorporated in Nigeria and registered as an external company in South         
Registration number: RC 6474                                                    
(External company registration number: 2005/038824/10)                          
Share Code on the JSE Limited: OAO                                              
Share Code on the Nigerian Stock Exchange: UNTP                                 
ISIN: NGOANDO00002                                                              
("Oando" or "the company")                                                      
Oando acquires two rigs from Shell                                              
-  OES Emerges Nigeria`s largest indigenous drilling services provider          
-  Total rigs in fleet now five                                                 
-  Investment in energy services now $250 million                               
Oando Energy Services, a subsidiary of Oando PLC - Nigeria`s leading            
integrated energy solutions provider, has emerged Nigeria`s largest             
indigenous drilling contractor with Oando`s acquisition of two inland barge     
rigs from Shell Petroleum Development Company of Nigeria Limited (SPDC) for     
an estimated USD 43.5 million inclusive of VAT.                                 
This latest acquisition brings to five, the total number of rigs in Oando`s     
fleet and clearly reinforces the company`s position as the leading beacon in    
the oilfield services sector of Nigeria`s oil and gas industry.                 
The two former Parker Drilling rigs which were purchased by SPDC in 2006 have   
the following specifications:                                                   
      Rig     Rig       Pressure     Horse        Drilling   Application        
      Name    Type      Output       Power (hp)   Depth                         
1.     RIG 1   barge     10,000 psi   3,000        25,000ft   Drilling and      
2.     RIG 2   Swamp     10,000 psi   3,000        30,000ft   Drilling &        
wells with        
Commenting on the acquisition, Mr. Uche Dimiri, Chief Executive Officer,        
Oando Energy Services, said: "The Niger Delta swamps contain abundant           
reserves that are crucial to Nigeria achieving its plan to increase             
production levels to 4 million barrels per day by 2010.   The understanding     
that there must be increased drilling activity across all stages of oil         
exploitation, from exploration to development, for the government`s targets     
to be realised forms the basis of our continued investments in swamp drilling   
rigs. The cantilever capability of Rig 2 (formerly Parker rig 75) is unique     
in Nigeria. This feature enables Rig 2 to drill multiple well slots while       
remaining at the same client location, thus optimising reservoir drainage       
while reducing the overall cost of well construction.  We intend to combine     
this uniqueness with our superior community relations expertise to deliver      
not only significant cost savings but other operational efficiencies to our     
customers.  An added feature of Rig 1 is its 3,000 horsepower rating which      
gives Oando the flexibility to upgrade it to a High Pressure, High              
Temperature (HPHT) rig. This conversion will increase to two the number of      
such rigs in the country for exploiting reservoirs with such peculiarity."      
"Rig 2 was acquired together with an existing contract whilst Rig 1 (formerly   
Parker 73) is scheduled to go to shipyard where it will undergo life            
enhancement and upgrade prior to its deployment in 2010." Mr. Dimiri added.     
Mr. Wale Tinubu Group Chief Executive said, "This latest acquisition boosts     
our investment to approximately $250 million out of the $500 million five-      
year development plan announced prior. With a further resolve to increase our   
rig fleet in the near future, we are positioning Oando as the partner of        
choice for world-class land and swamp oil field services. By the purchase of    
an asset already in contract, we expedite value extraction for our              
shareholders, whilst guaranteeing significant and steady long term revenue      
for the group."                                                                 
27 July 2009                                                                    
Deutsche Securities (SA) (Proprietary) Limited                                  
Date: 27/07/2009 07:30:01 Supplied by www.sharenet.co.za                     
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